The ruling by the 2nd U.S. Circuit Court of Appeals in the Linde v. Arab Bank case drew the attention of the Congressional Research Service, which analyzed the impact.

CRS said the court, by “holding that victims of terror attacks are not always entitled to recover civil damages even if they prove the defendant committed the crime of material support, highlights the legal complexities and obstacles that plaintiffs face when seeking civil damages under [the Antiterrorism Act.]”

One takeaway is that the understanding of liability for terror is changing.

“Congress has expressed interest in providing civil remedies to victims of terrorist attacks abroad for several decades,” the CRS report said. “The ATA was passed partly out of concern that the family members of Americans killed in the 1985 hijacking of a Mediterranean cruise ship and the Pan Am Flight 103 bombing could not seek redress in U.S. courts.

“In recent years, this interest has expanded to permit so-called ‘secondary liability’ for those who aid and abet – but do not directly participate in – terrorist acts. … The Justice Against Sponsors of Terrorism Act extended ATA liability to those who conspire to commit acts of international terrorism or who aid and abet those acts by ‘knowingly providing substantial assistance.'”

In the case, the plaintiffs might have been able to assert an aiding and abetting claim against the bank under JASTA if they had not agreed to a settlement, the court found.

The 2nd Circuit’s decision overturned a jury verdict that found Arab Bank liable for injuries and damages to Americans during the second Palestinian intifada.

The Americans were set to recover a stipulated $100 million from Arab Bank under the civil liability provisions of the ATA.

But the 2nd Circuit vacated the decision, “holding that the trial court incorrectly concluded that a violation of the federal law criminalizing material support to foreign terrorist organizations necessarily constitutes an ‘act of international terrorism’ subject to civil liability under the ATA,” CRS said.

Arab Bank was discovered to have processed more than $30 million in wire transfers for senior Hamas leaders and charities known to funnel money to the terrorist organization.

The CRS report said some transfers were identified expressly as compensation for “martyrdom operations” – meaning they were payments promised to the families of terrorists who completed suicide attacks.

The trial court also sanctioned Arab Bank for its decision not to produce bank records of some foreign account-holders.